In the first of our series, covering Singapore’s 2022 budget, we look at new tax systems that could affect city-state businesses and individuals.
On February 18, 2022, Singapore unveiled its S $ 109 billion (US $ 80 billion) 2022 budget, providing several tax increases for the high-income group and the expected increase in goods and services taxes in 2023.
The move comes as Singapore emerges from the recession as the government has pledged S $ 100 billion (US $ 74 billion) over the past two years to protect the economy from the effects of the epidemic.
Singapore’s Finance Minister Lawrence Wong has announced that the expected deficit in this year’s budget will be S $ 3 billion (US $ 2.2 billion) or 0.5 percent of GDP, less than the S $ 5 billion (US $ 3.7 billion) deficit in 2021 and lower than previously estimated. S $ 11 billion (US $ 8.1 billion). In addition, the government will fund S $ 6 billion (US $ 4.4 billion) from the huge reserves of Singapore for the Covid-19 public health system.
The economy grew 7.4 percent in 2021, recovered from an epidemic-induced contraction of 5.4 percent in 2020, and is expected to expand three to five percent for this year. Nevertheless, recovery is expected to be uneven, especially for the aviation and tourism industries, which will take longer due to concerns over viruses and new forms.
The top marginal personal income tax (PIT) will be increased for the 2024 assessment (YA).
The Goods and Services Tax (GST), also known as Value Added Tax (VAT), will be increased in two steps:
With the growth of the online travel booking industry, the government aims to ensure that the GST system is kept resilient to support this industry.
This article was first published by AseanBriefing which is produced by Dejan Veins & Associates. The company supports foreign investors across Asia from the office Around the worldIncluding China, Hong Kong, Vietnam, Singapore, IndiaAnd Russia. Readers can write [email protected]